Post Session: Quick Review

Snapping two consecutive sessions’ losing streak, benchmarks bounced back with a bang on Thursday and traders resorted to hunt for undervalued fundamentally strong bargains amid firm global cues. The session turned out to be heartening as barometer gauges after gap-up opening, went on a gaining spree to conclude only near day’s high. Although, bit of profit-booking was witnessed in the early deals but the last hour spurt mainly provided the fire power to the bulls to go all gun blazing by the end of the session. Additionally, surge of index heavyweight, L&T, ITC and RIL, also contributed to the uptrend of the bourses. Thus, with across the board-buying, benchmark indices, Sensex and Nifty, gaining over a percent, reclaimed the crucial 19,400 (Sensex) and 5,800 (Nifty) respectively. Broader indices, showed degree of underperformance as compared to larger peers and went home with gains of close to about a half a percent.

On the global front, World stocks rallied Thursday, shrugging off worries over political turmoil in Egypt and a possible resurgence of Europe's sovereign debt crisis to focus on positive economic news from the US, where markets are closed for Independence Day.

Closer home, Rupee’s sharp recovery also bolstered sentiment at D-Street. Speculation that Unilever Plc will bring in capital to complete a $5.4 billion open offer to boost ownership of its Indian unit, also supported the local currency. However, the local currency gave away some of its early strength after Reserve Bank of India (RBI) governor D. Subbarao said that the central bank is not looking to protect any particular level of exchange rate but will iron out volatility.

However, sentiments got some support from Aviation stocks, i.e, Spicejet, and Kingfisher Airlines, after reports suggested of Government looking into plea for review of FDI in aviation. On BSE sectoral front, stocks from Fast Moving Consumer Goods (FMCG), Information Technology (IT) and Consumer Durable counters hogged maximum limelight, while there were no losers.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1253: 1040, while 137 scrips remained unchanged. (Provisional)

The BSE Sensex gained 240.00 points or 1.25% to settle at 19417.76.The index touched a high and a low of 19445.02 and 19245.01 respectively.  The BSE Mid cap and Small cap indices ended higher by 0.68% and 0.24% respectively. (Provisional) 

On the BSE Sectoral front, FMCG up by 2.77%, IT up by 2.62%, Teck up by 2.27%, Realty up by 1.85% and Consumer Durables up by 1.24% were the top gainers, while Metal down by 0.24% was the only losers in the space. (Provisional)

Out of the 30 stocks on the Sensex, 21 stocks settled higher, while 9 stocks settled lower. The top gainers on the Sensex were Tata Power up by 3.76%, ITC up by 3.62%, TCS up by 3.26%, Tata Motors up by 2.95% and Hindustan Unilever up by 2.72%. On the flip side,  BHEL down by 1.74%, Tata Steel down by 1.61%, Sterlite Industries was down by 1.30%, Bajaj Auto was down by 1.14% and Cipla was down by 0.50% were the top losers on the Sensex. (Provisional)

Meanwhile, in a big sigh of relief to the non-banking financial companies (NBFCs), the Reserve Bank of India (RBI) has put on hold implementing a key directive issued last week with a proposal to have a minimum gap of six months between two successive issuances of privately-placed non-convertible debentures (NCDs) and said that it may not be operationalised immediately.

The RBI said that it is keeping the proposal on hold and will take decision on this in due course. The restriction for NBFCs to raise funds through NCDs has resulted into inadequate resource planning, and higher transaction cost. Further, the central bank asked all NBFCs to prepare a policy for resource planning which should cover the planning horizon and the periodicity of private placement and get it approved from their boards by September 30. It is expected that the move will benefit large NBFCs given their dependence on the bond market.

Last week, the apex bank issued a circular, which stated that private placement of debt should not have more than 49 investors; minimum subscription from single investor should be Rs 25 lakh and also stipulated the time frame between two NCD issuances. One of the main objectives of the restriction between two NCD issues was to promote discipline in resource planning and raising. However, the move was likely to increase borrowing costs for NBFCs and potentially create assets liability tenure mismatches.     India VIX, a gauge for markets short term expectation of volatility lost 1.74% at 18.58 from its previous close of 18.91 on Wednesday. (Provisional)

The CNX Nifty gained 71.35 points or 1.24 % to settle at 5,842.25. The index touched high and low of 5,848.20 and 5,786.05 respectively. Out of the 50 stocks on the Nifty, 35 ended in the green, while 14 ended in the red and one remained unchanged.

The major gainers were Reliance Infrastructure up 4.09%,HCL Technologies up by 3.95%, ITC up by 3.88%, Tata Power up by 3.63% and BPCL up by 3.54%. The key losers were BHEL down by 2.40%, Tata Steel down by1.71%, Sesa Goa down by 1.53%, Cipla down by 0.79% and Axis Bank down by 0.78%.(Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.82%, Germany’s DAX up by 0.58% and the United Kingdom’s FTSE 100 up by 1.09%.

Most of the Asian equity indices shut shop in the green terrain on Thursday as sentiments remained up-beat ahead of European Central Bank meeting and the US non-farm payrolls report. Back on regional turf, Hong Kong shares produced their first gain in three sessions, as investors covered short positions ahead of the ECB meeting. Meanwhile, South Korean Kospi Composite edged higher by over half a percent on report that South Korea has proposed a working-level talk with North Korea to discuss restarting a shuttered joint industrial complex in the North. However, the Japanese market ended the session in the red as the yen moved back above the 100 mark against the dollar overnight.